the way I read it,
5 years at 5% comp. monthly, then
5 years at 3% comp. monthly
amount
= [100(1.0041666...^60 - 1)/.0041666...](1.0025^60) + 100(1.0025^60 -1)/.0025
= 7899.70 + 6464.67
=14364.37
You forgot that the first 60 payments would still accumulate interest for the last 5 years but at a reduced rate of 3%
I think your answer was obtained from
100(1.0041666...^60 - 1)/.0041666... + 100(1.0025^60 -1)/.0025
missing the 1.0025^60 from the first part
From January 1, 2000 to December 31, 2004, First Bank paid 5% interest, compounded monthly. On January 1, 2005, they lowered their rate to 3% interest, compounded monthly. I deposited $100 at the end of each month beginning in January, 2000. How much did I have in my account immediately after my deposit on December 31, 2009?
The answer is $14,364.37, but I keep getting $13,265.28
1 answer
1 answer